(Appendix 4B) Ockey Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Information Technology and Personnel, and two operating departments, Fabrication and Customization.
Information Technology Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees.
-The total amount of Information Technology Department cost allocated to the two operating departments is closest to:
A) $26,880
B) $15,929
C) $58,119
D) $21,943

Question

(Appendix 4B) Ockey Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Information Technology and Personnel, and two operating departments, Fabrication and Customization.
  Information Technology Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees.
-The total amount of Information Technology Department cost allocated to the two operating departments is closest to:
A) $26,880 
B) $15,929 
C) $58,119 
D) $21,943

Quizplus · Accepted Answer

Information Technology costs to be allocated = $26,880

(Appendix 4B) Ockey Corporation Uses the Direct Method to Allocate